Fitness Facilities Help Your Community Stand Out From The Rest
June 23, 2016
Should You Buy or Lease Your Fitness Equipment?
December 10, 2018
If you’re expanding your existing gym business, or planning to open your first fitness club, gym equipment financing will always be a key factor in making your vision a reality. This guide shares our experience with you to help you make the best possible financial decision for your business.
What are the common equipment financing options?
How you finance your new or existing gym requires careful consideration and should be viewed as a strategic decision, in the same way that you decide on things such as your location, your target market, and your membership fees.
It’s important to recognize that every business is different, so the right options for you will be based on your individual circumstances. Below are some common funding choices available to you:
1. Purchasing equipment using your own cash resources
Paying for fitness equipment upfront with cash is one way to quickly invest in new equipment without drawing out payments for years to come. However, it could mean that you’re without significant working capital down the line if unforeseen issues or costs arise. Using cash or financing is a decision that each individual owner will have to make based on their circumstances.
Equipment leasing is also a very commonly used method of funding. Although similar to bank loans, equipment leases have some advantages that may be beneficial to business owners.
Why lease gym equipment?
Many businesses choose to lease gym equipment for the following reasons:
It is often easier to obtain an approval.
It provides the ability to spread the cost over time.
It may free up capital for use in other areas of the business.
Interest rates are very competitive and fixed throughout the length of the term.
There may be tax advantages based upon your business structure. (Note: always consult your tax professional.)
Leasing comes in many forms.
There are multiple types of equipment leases:
Capital Leases – This is the most common form of financing in the fitness industry. The equipment purchase amount is financed over the term. The business owns the equipment at the end of the term. Term lengths usually range from 1-5 years.
Fair Market Value/Residual Leases – This structure is less common in the fitness industry. They are often used by large institutions such as universities, YMCA groups, etc. There is always some form of balloon payment due at the end of the lease term to own the equipment. There may be tax advantages for certain business structures.
Rental Leases – True rental leases are extremely rare in the fitness industry. Most financial companies will not provide this type of financing.
How can Integrity Fitness help?
Integrity Fitness can lease and finance top name brands for your facility. We have the ability work within your budget to get you the equipment that you need at a price you can afford. We can work with schools, park districts, fire departments, police departments, and multi-unit housing unique budgets to supply you with the needed equipment at the right price. Contact us today to see how we can help you!